US Court Tells Brazilian Court To Stop Ruling On Copyright Issue That It Wants To Rule On First

from the international-disputes dept

One of the issues that we've been discussing on Techdirt since the very beginning is the big question of how do you determine proper jurisdiction on internet related lawsuits, since the internet is accessible anywhere. Over the years there have been different rulings and different thoughts on this, but it's not clear there are good answers. The worst idea, of course, is suggesting that because something is available anywhere, it's subject to all rules. That creates a least common denominator setup, in which the absolute most restrictive rules win out around the world. That would hinder innovation tremendously. Almost as bad is the view that the US government appears to take, which is that the US's rules matter on most of the internet, because the major URLs of the internet (such as .com) are managed by a US company. That's pretty crazy, and is going to lead to serious international problems in the long run. I think a more reasonable (though far from perfect) test is simply an analysis of (1) where the actual business is located and (2) where the servers are located. It seems reasonable to focus mainly on where the company is located, and as a secondary measure, look at where the servers are located, and then use that for jurisdiction.

But, of course, when you're dealing with multiple parties, there can be questions of multiple jurisdictions. In the US, when there's a dispute over jurisdictions, such as when a declaratory judgment is filed for in one district, and the other party wants to file the lawsuit in another district, efforts are made to explain to the court that first got the case which district is best, and the court then decides to keep the case or boot it to a different district. But what happens when there are international jurisdiction disputes?

TechCrunch alerts us to a fun case in which Zynga (who has a well known history of copying other company's games) sued a Brazilian startup named Vostu, which it accused of copying its games. Personally, I think Zynga should shut up and not open up such a can of worms that might come back to bite it as well, but Zynga seems to be focusing a lot on being a legal bully lately. Either way, it filed lawsuits in both the US and in Brazil. While the US court, as typically happens, was taking its sweet time, the Brazilian court actually ruled in favor of Zynga (against the hometown favorite) and issued a preliminary injunction, telling Vostu to shut down within 48 hours.

And here's where things get interesting. This woke up the US court (at the request of Vostu), who has ordered Zynga not to enforce the Brazilian decision. As the court notes, it wants to "maintain the status quo" until it has a chance to decide the preliminary injunction question. Furthermore, even as Zynga argues that the two lawsuits are separate, as one covers Brazilian copyright law and the other covers American copyright law, the US court points out that the impact of the Brazilian ruling will hit the US as well:

But one clear policy that all federal courts recognize—even those which have been loath to interfere with foreign proceedings—is the need to protect the court’s own jurisdiction.... The Brazilian injunction evidently purports to restrict all use of the works in suit everywhere. It appears that enforcement of the exceptionally broad Brazilian injunction would prevent this Court from meaningfully adjudicating the claims of U.S. copyright infringement in this case.

As the court notes, allowing the Brazilian injunction to go forward could harm the US court's ability to decide the case... and, by the way, it notes that Zynga filed in the US first, and should wait for the US court to weigh in:

The injunction issued in the Brazilian action is a grim backdrop against which to consider issues of comity. To be sure, Brazil has an important interest in enforcing its copyright laws. But Zynga—which chose the U.S. forum first—now seeks to enforce an injunction it obtained abroad that would paralyze this Court’s ability to decide this case. Comity norms do not abide such a result.

It will be interesting to see if this cross-border dispute goes much further, because I would expect that we're going to see a lot more international jurisdiction battles in the near future, and how courts deal with these could become a very big deal.

not cool

I agree with the US court on this especially after reading [where] "The Brazilian injunction evidently purports to restrict all use of the works in suit everywhere."

That is a problem with most civil courts when dealing with the internet nowadays, they either try to make orders for situations where their mandate is not enforceable, or do not realise that their orders can be interpreted to mean that by the separate parties and other jurisdictions. All civil courts/forums are doing this lately, Brazil is by far not alone, even the USA tries it on.

As for comity, comity is all fine and good but it does not allow one Jurisdiction (in this case Brazil) to override the sovereignty of another (in this case USA), no matter what some organisations, pundits, and courts think. Also Comity is just a form of courtesies between jurisdictions.. Its not actually legal enforceable and its basically at the discretion of the forum in question.

This basically became a problem due to the Forum Shopping that Zynga, by their actions, have tried to do. Forum shopping is frowned upon by all jurisdictions, and could at the most land Zynga in a lot of bother, at the least give the USA court (or any court) the discretion to remove the doctrine of comity from the discussion.

If the order is enforceable in Brazil, I don't see how the US court has a leg to stand on. A Brazilian court told a Brazilian company what to do. Doesn't seem to be our business, despite what the over reaching US justice system seems to think.

If they want to have it heard in the US too, they can move their corporation out of Brazilian jurisdiction.

the US seems to still want to tell the world that it's controlling the whole internet. when it makes a judgment in the US, every other country is expected to abide by that decision, regardless of whether the copyright rules of that country are different to those in the US or not. seems to me like US double standards, yet again!

I agree with A Guy and add surely this is against international law with regard to jurisdiction. however if the company is Brazilian and owned by Brazilians how can anyone move it out of Brazilian jurisdiction. USA imposing its law on the rest of the world again.

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There is no such thing as "international law" on civil disputes unless you are talking about Treatise (which are then not civil but also not criminal but binding on soveriegn"), or Arbitrage, or you might be thinking about Conflict of Laws which is sometimes called "private international law"

And just because the company is Brazilian, does not mean it does not come under other rules, regulations, and laws of where it might conduct it's business.

The real problem in this matter is the problem of Forum shopping and only something like tort reform WORLDWIDE can stop it realisticaly.

US vs the World

I'm still not comfortable with this idea that the US is telling Brazilian courts what is expected. We've had US companies try to sue foreign companies and make declatory judgements. There's also precedents for making judgements against foreigners to send a message.

Why should the US decide to play this card when the US has done the same thing to others?

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"He did it first, so I can do it too!" is not an argument that will fly in-

...Oh wait, the concept of precedent.

Joking side though, it doesn't matter if it is the US or not. One country cannot overreach and declare something be removed from the entire internet. At best it can be restricted from availability in that particular country. This is why The Pirate Bay is still up much to the chagrin of the RIAA/MPAA, because they aren't located in the US so the US courts can't rule on them.

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It was a Brazillian company in Brazil they can order them to shut down the service from Brazil. If they cannot provide the service from Brazil they will have to move or could face sanctions from the countries court system for ignoring a direct court order.

Sorry, but I have to agree with the court. Zynga filed in the US first, and therefore agreed to US jurisdiction. They shouldn't then be allowed to sue in Brazil for the exact same thing.

You can't be allowed to file TWO preliminary injunctions for the same thing because you think the first court is taking too long. If Zynga wanted to move the entire case to Brazil, that would be one thing, but that doesn't appear to be what they're doing.

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Sure, any court can produce rulings that affect other jurisdictions. That doesn't mean much. For example, a European court could take down a European run website accessible to me in the US. That doesn't mean any foreign court has authority over any person or property in the US, and vise versa. Countries will always try to enforce their own laws to the farthest extent possible. How those laws interact are governed by extralegal actions, either diplomacy or war.

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I don't think the US courts actually expect other countries to abide by their decisions, it's just that the US happens to own a large portion of the internet infrastructure, so they have de facto legal control over it. That will surely change over time, and/or they will realize that more consensus is beneficial.

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As I remember from many years back, the basic conflict-of-laws analysis is this. The US and Brazil are both sovereign. The US has no power to enjoin a Brazilian court, or vice-versa. However, a Brazilian court has no power to enforce its orders outside its sovereign jurisdiction. The holder of the order must ask other sovereign countries (e.g., the US in this case) to enforce it. Unless enforcement is required by international treaty, the second sovereign may chose to enforce it on comity grounds, or refuse to do so base on public policy. Therefore, the correct result is this.

[1] The US court cannot tell the Brazilian court to "stop ruling" on the issue. It has no such power.
[2] The US court may block enforcement of the Brazilian order in the US.
[3] The US court may eventually issue its own decision, which will be enforced in the US, but can only be enforced in Brazil if a Brazilian court agrees to do.